Insurers, Miners Lift London Stocks

Darlington Musarurwa
20 Mar, 2009
New York City

U.K. stocks closed higher for the second day in a row on a rise in insurance and mining stocks. Banks closed lower. Regus Group Plc surged 31% to 65.5 pence after the rental office services provider reported 2008 annual revenue rise of 25% and earnings gain of 11%.

[R]3:00PM New York, 7:00PM London – U.K. stocks closed higher for the second day in a row on a rise in insurance and mining stocks. Banks closed lower.[/R]

Second day gains in insurance and miners lifted market indexes in London.

FTSE 100 index, the benchmark stock market index added 25.92 or 0.7% to 3,842.85, a rise of 2.4% for the week and a loss of 13% for the year so far.

Insurance stocks rallied for the second day in a row after Prudential Plc suggested that it has adequate capital.

Legal & General added 12% to 42.80 pence, Prudential Plc increased 17% to 332.75 pence, Friends Provident plc increased 2.6% to 60 pence and Aviva plc surged 8.8% to 238 pence.

Resource stocks gained for the second day in a row on the hopes that the metal prices will remain high and may trade higher after the recent government actions in the U.S., China, Europe and UK. The Fed statement to authorize nearly $1 trillion in purchase of U.S. government and its agencies debts also supported buying.

Mining and energy stocks gained. Anglo American soared 5.9% to 1,291 pence, Xstrata Plc added 5.1% or 22 pence to 455 pence and Kazakhmys Plc added 5.4% or 18.75 pence to 368.50 pence. Tullow Oil added 4.9% and Cairn Energy increased 4.5%.

Lonmin Plc dropped 6.6% to 1,367 after Investec lowered its view on the mining company stock.

However, large group of investors remain skeptical and are on the side lines. Global investors are worried that recent rise in UK and European stocks is temporary rally seen in bear markets and market indexes may test the lows in November of last years.

Gainers & Losers

Of the stocks in FTSE 100 index, 66 increased, 35 declined and 1 was unchanged.

Barclays led decliners in the FTSE 100 index with a fall of 6.7% followed by losses in HSBC Holdings Plc of 5.6%, in British Land Company Plc of 5.3%, in AMEC Plc of 3.4% and in Invensys Plc of 2.9%.

Prudential Plc led gainers in FTSE 100 index stocks with a rise of 17% followed by increase in Standard Life of 13.8%, in Legal & General Group of 12.4%, in Aviva Plc of 8.8% and in Scottish & Southern Energy Plc of 6.7%.

Regus Group Plc surged 31% to 65.5 pence after the rental office services provider reported 2008 annual revenue rise of 25% to £1.08 billion and earnings increase of 11% to £114.9 million. Earnings per share increased to 11.8 pence from 10.4 pence.

Europe Markets Review

In London FTSE 100 Index closed higher 25.92 or 0.68% to 3,842.85, in Paris CAC 40 Index increased 14.15 or 0.51% to close at 2,791.14 and in Frankfurt DAX index higher 25.28 or 0.63% to close at 4,068.74. In Zurich trading SMI decreased 7.46 or 0.16% to close at 4,787.17.